Inverted hammer
Encyclopedia
The Inverted Hammer is a type of bullish reversal pattern. As its name implies, the Inverted Hammer looks like an upside down version of the hammer candlestick pattern. Like the hammer candlestick pattern
, the Inverted Hammer consists of one candle and when found in a downtrend is considered a potential reversal pattern.
The pattern is made up of a candle with a small lower body and a long upper wick which is at least two times as large as the short lower body. The body of the candle should be at the low end of the trading range and there should be little or no lower wick in the candle.
The long upper wick of the candlestick pattern
indicates that the buyers drove prices up at some point during the period in which the candle was formed but encountered selling pressure which drove prices back down for the period to close near to where they opened. As this occurred in an uptrend the selling pressure is seen as a potential reversal sign. When encountering the Inverted Hammer traders will look for a higher open on the next period before considering the pattern confirmed and potentially including it in their trading strategy
Hammer (candlestick pattern)
A hammer is a type of bullish reversal candlestick pattern, made up of just one candle, found in price charts of financial assets. The candle looks like a hammer, as it has a long lower wick and a short body at the top of the candlestick with little or no upper wick...
, the Inverted Hammer consists of one candle and when found in a downtrend is considered a potential reversal pattern.
The pattern is made up of a candle with a small lower body and a long upper wick which is at least two times as large as the short lower body. The body of the candle should be at the low end of the trading range and there should be little or no lower wick in the candle.
The long upper wick of the candlestick pattern
Candlestick pattern
This page provides a brief introduction to 42 patterns of Japanese Candlesticks Chart. Candlestick pattern recognition is subjective and programs that are used for charting must rely on predefined rules.- History :...
indicates that the buyers drove prices up at some point during the period in which the candle was formed but encountered selling pressure which drove prices back down for the period to close near to where they opened. As this occurred in an uptrend the selling pressure is seen as a potential reversal sign. When encountering the Inverted Hammer traders will look for a higher open on the next period before considering the pattern confirmed and potentially including it in their trading strategy
See also
- Shooting starShooting star (candlestick pattern)The shooting star is a type of bearish reversal pattern. The Shooting Star looks exactly the same as the Inverted hammer, but instead of being found in a downtrend it is found in an uptrend and thus has different implications...
— Inverted hammer pattern found in an uptrend
External links
- Inverted hammer at onlinetradingconcepts.com
- Inverted Hammer Information at candlecharts.com